Cork closures in even greater demand

Carlos de Jesus explains how real cork closures are taking back market share from plastics and screwcaps while, at the same time, global demand is increasing with the opening up of new markets

Carlos de Jesus Amorim

There is an assumption among consumers that cork is in decline as a closure.  Is this true?

Carlos: Absolutely not!  In fact late last year Amorim hit the 4 billion - that's 4000 million - mark in annual cork stopper sales, which makes us the biggest producer of closures in the marketplace, whatever the material.  That's a significant jump from the 3.5 billion units we announced in previous years, and we have definitely taken market share not only from plastics but also a small amount from aluminium screwcaps.  There are wineries in South Africa, USA, Australia and even New Zealand, the ideological home of the screwcap, moving back to natural cork closures, which they consider a better closure.

What makes our increasing sales even more interesting is that we not only have a larger share of the closure sector, but that also this 'cake' is growing rapidly.  Recent forecasts predict that global  wine consumption  will grow to a record 3.59 billion 9-litre cases overall within three years, as new markets open up, and new wine- producing areas  come on stream. 

So how and where will these new markets develop?

Carlos: As we know from our relationships with customers in all key wine-producing and consuming countries, the US and China continue to be two major growth areas.  In addition, markets in Eastern Europe and Africa will become more important, rather than less so, as more consumers take up wine drinking.  The potential is huge for cork closures here.

In China, all research points to a strong consumer preference for natural cork - seen as added value and a mark of quality. Anything else is doubted in terms of both performance and image.

In the last two years, our sales to China's producers grew by 11%, and of course New and Old World wines, hoping to gain a foothold in this valuable market, are looking to cork closures to strengthen their credentials.

While this might be true of an emerging wine market, we have a similar experience in the United States.  Tragon, the international research company has just published their latest findings on closure preference in the US, Germany and Australia. In the US, over 90% perceived natural cork as appropriate for all occasions and price points, and as an indicator of quality. And almost 65% would choose natural cork over everything else when making a purchase. That's a lot of bottles for cork to close.... but also a clear indication of where the value-creation capabilities of each type of closures lies.

What does all this mean for Amorim?

Carlos: Although we are the biggest producer in the world, we must not - and will not - sit on our laurels.  Every market is different, every winery has equally different requirements, often with a complex, multi-price point range of wines to produce. There is a cork stopper for everyone, so we work constantly with our customers to develop the best solutions - adapting our product range to suit, and even creating new closures. No other closure producer has such a wide selection, from the top quality, hand-punched whole corks and traditional Champagne stoppers to the popular TwinTop, with its discs at each end of a granulated shank, as well as technical stoppers in varying shapes and sizes.

And of course, we now have the revolutionary (in both senses of the word) twist and pour Helix System that does away with the corkscrew. We predict there will be great excitement when the first Helix-closed bottles hit the shelves this summer....

Can you meet this growing demand for cork?

Carlos: Indeed we can, because there has been major investment in replanting the cork oak forests for decades.  It takes around 40 years for a tree to reach maturity, with bark good enough to be hand-harvested.  Cork farmers have been encouraged for years to plant new oaks and replace older ones, so that now over 736 thousand hectares are given to the cork forests in Portugal alone.  Amorim, as the market leader, has signed up to help forestry landowners with responsible farming techniques.

As the forests increase, so too does the conscience of environmentally-friendly consumers globally.  Having become the first packaging company to obtain Forestry Stewardship Council (FSC) accreditation in 2009, more than 30 or our production units have now gained that status.  That means that, more and more, we can offer a closure that is not only 100% natural, but also 100% sustainable.

Like fabric for the fashion industry, closures are purchased for the production line several seasons ahead of the bottles appearing on shelf.  So we know what the global trends are likely to be, and are able to react accordingly.  And like our material, we are 100% flexible.

6 March 2014